A Bitcoin whale is a term found in the cryptocurrency community. In fact, there are whales for all types of cryptocurrencies, not just for Bitcoin.

This term is used to describe an individual(s) or organization that holds vast amounts of Bitcoin or other cryptos. They hold so much that they have the potential to influence and/or manipulate the crypto’s value.

Becoming a Whale

While there is a name for someone or some entity buying up a lot of crypto, there isn’t an exact definition as to how much is enough to reach whale status. You'll find varying answers depending on where you go and the meaning is fairly subjective.

However, owning around 10% or more of the total number of coins or tokens available is the generally recognized amount. Simply because whales tend to always hit around ten percent or more each time one comes along.

Why Cryptocurrency Whale?

The name, crypto whale, was created because… well, whales are much much larger than the small fish in the ocean. Or in this case, those who own large amounts of one crypto are huge compared to the small investors in the crypto sea.

Notable Examples

According to BitInfoCharts, just four wallets owned 3.49% of all the Bitcoin in circulation in May 2022, and the top 100 wallets held around 15.36% of all bitcoin.

However, one Bitcoin whale flew ahead of everyone else and by the 22nd of June had amassed the largest amount of Bitcoin on record.

The Daily Hodl reported that the world’s largest non-exchange Bitcoin whale now holds over $2 billion worth of BTC after a string of massive transactions earlier this month.

After analyzing the data available, the whale has added 2,554 Bitcoin in a series of transactions since June 14th, and a further 1,698 BTC worth $36.62 million over the next four days.

In the few days following, the whale then accumulated another huge quantity of Bitcoin totaling 856, worth around $17.35 million

Given that even more transactions have taken place in the few days before this was written (28th June), it’s unlikely that any whale will be able to outdo this current one.

Owning more than $ 2 billion of BTC is a bold move, even for the most enterprising of investors.

Dogecoin is another crypto that has several whales in the midst. This meme coin is even more centralized than BTC and as of May 2022, 15 addresses accounted for around 52% of all the coins. That is roughly 29.5 billion coins split among just 15 addresses.

While there is nothing illegal about buying as many coins, tokens, or other digital currency as you want, these addresses and whales are still closely monitored by the community as well as potential investors.

Follow the Whales

You can even follow the transactions of the top 100 wallets on the Whale Alert official website as they are announced in real-time. Following these updates and alerts can give you a keen insight into what the top investors are doing with their growing number of coins.

Can a Whale Affect Liquidity?

Absolutely! Coins or tokens sitting in wallets not being used, exchanged, or sold will always have a huge effect on liquidity. Just like with fiat currency.

If everyone kept their money in their bank account and didn’t move, transfer or spend the money, there would be a global problem as there would be less cash available and low liquidity.

Whales hold crypto in place and take away from others the chance to buy or exchange.

Can a Whale Affect Price?

All crypto, coins, and digital tokens are already volatile, some more than others. This is due to the nature of having an unregulated currency, it is subject to far more fluctuations than other commodities. Bitcoin is no exception to this and has always been described as a volatile investment.

Whales, when they do come along, only add to the currency's volatility. Especially if large amounts of currency are being bought in single transactions.

For example, when an investor is selling their BTC for fiat currency, the lack of liquidity and large transactions going on create a downward push on the price of Bitcoin.

This is because all these transactions are publicly known so other investors know exactly what is going on.

So, when a whale comes along, most investors become cautious about buying new coins as they fear the whale may be accumulating crypto to drive up the price and then dump it for a quick profit.

This cautious behavior that whales create among other investors can actually cause the price of the crypto to reduce.

One common sign that investors look out for is the average amount of a specific cryptocurrency being deposited into exchanges. If this average number goes above 2, then the whale(s) are more likely to start offloading.

What You Should Know If You’re an Investor

While large transactions can be whales, it’s important to remember that not every large transaction is a whale.

Sometimes, these transactions or movements are from someone making a large purchase using crypto, changing wallets, selling off due to an emergency, or some other completely innocent reasons.

So, if you notice a large sell-off, don’t panic.

Besides, as a way to go undetected, whales have been known to sell off their assets slowly in small increments over a longer time. Thus, avoiding unwanted attention and suspicion in the community.

By doing it slowly, they can also distort the market better with fewer people noticing.

Due to this, investors and community members keep an eye on wallet addresses that are known whales and bring attention to the transactions even if they’re small.

You too can keep an eye on these transactions using the Whale Alert website linked previously. Or even by following online forums where other members will do the tracking and then update the community as a whole.

Whale watching is always a good idea but not panicking when one comes along is an even better idea.

Useful Bitcoin Whale FAQs

Are the Identities of Whales Known?

Not all, only some. This is because while Bitcoin isn’t completely anonymous, there is enough anonymity that an investor or entity can’t be doxxed or exposed.

However, the ones who have publicly stated they hold large amounts of crypto are Sam Bankman-Fried, Micheal Saylor, and Brian Armstrong.

Why Was the Term Whale Chosen?

The name whale was chosen because, like in the ocean where whales are much bigger than the small fish in the same space, crypto whales hold much bigger investments than the individuals who have very little crypto in comparison despite being in the same space.

Do Whales Manipulate Crypto?

Because whales can manipulate the crypto they are buying, other investors and community members keep a close eye on their transactions.

However, it’s not easy to say whether whales are buying large quantities of crypto for nefarious reasons or because they genuinely believe their actions are the best investment they can make.

What Constitutes a Whale?

While there is no set definition, an individual or entity owning around 10% of the total available coins for a type of crypto would be considered to be at whale status.

Important Points to Takeaway

• A Bitcoin whale (or crypto whale) is a wallet address that holds a large amount of currency
• Whales can and do happen in all types of cryptocurrencies not just Bitcoin
• Crypto whales can manipulate the price of the currency and as such, investors carefully track their movements on the ledger
• The opposite of a crypto whale is a crypto minnow, a minnow is the smallest fish in the world and thus as far away from a whale as possible
• Crypto minnows hold very little crypto in their wallets
• If you know a crypto whale is currently operating in the crypto you’re invested in, it’s important not to panic and sell off or make any rash decisions

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